Attribution is the process of giving credit to the marketing channels that led to a sale. In ecommerce PPC marketing, attribution models help businesses understand which channel or combination of channels is driving sales. Attribution modeling is especially important in PPC marketing because advertisers pay for each click, so they need to know which clicks are leading to sales.
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What is an Attribution Model?
An attribution model is a method used to determine how much credit each marketing channel should receive for a sale. There are several types of attribution models, each with its own strengths and weaknesses. The most common attribution models are:
First-click attribution: This model gives all credit to the first touchpoint in the customer journey. For example, if a customer clicks on a Facebook ad and then makes a purchase, the Facebook ad would receive all the credit.
Last-click attribution: This model gives all credit to the last touchpoint in the customer journey. For example, if a customer clicks on a Google ad and then makes a purchase, the Google ad would receive all the credit.
Linear attribution: This model gives equal credit to each touchpoint in the customer journey. For example, if a customer clicks on a Facebook ad, then clicks on a Google ad, and then makes a purchase, both the Facebook ad and the Google ad would receive 50% of the credit.
Time-decay attribution: This model gives more credit to touchpoints that are closer to the time of purchase. For example, if a customer clicks on a Facebook ad 30 days before making a purchase and then clicks on a Google ad the day before making a purchase, the Google ad would receive more credit than the Facebook ad.
Position-based attribution: This model gives the most credit to the first and last touchpoints in the customer journey and divides the remaining credit equally among the touchpoints in between. For example, if a customer clicks on a Facebook ad, then clicks on a Google ad, and then makes a purchase, the Facebook ad and the Google ad would receive 40% each and the remaining 20% would be divided equally among the touchpoints in between.
Why is Attribution Modeling Important?
Attribution modeling is important in ecommerce PPC marketing because it helps businesses understand which marketing channels are driving sales. By understanding which channels are most effective, businesses can allocate their marketing budget more efficiently and improve their return on investment (ROI).
For example, if a business is using a last-click attribution model and is only measuring the success of its Google ads, it might not realize that a significant portion of its sales are coming from Facebook ads. By using a different attribution model or an attribution platform, the business can get a more accurate picture of which channels are driving sales and adjust its marketing strategy accordingly.
Challenges of Attribution Modeling
Attribution modeling is not a perfect science, and there are several challenges that businesses may encounter when trying to attribute sales to specific marketing channels. Some of the most common challenges include:
Multiple touchpoints: Customers rarely buy on the first interaction with a brand. They may see an ad on Facebook, look up the product on Google, and then make a purchase a few days later. Determining which touchpoint should receive the most credit can be challenging.
Cross-device tracking: Customers may switch between devices when researching and buying products. For example, they might see an ad on their phone and then make a purchase on their laptop. Tracking this cross-device behavior can be difficult.
Offline conversions: Some customers may see an ad online and then make a purchase in a brick-and-mortar store. Tracking these offline conversions can be tricky, especially if the business does not have an online-offline conversion tracking system in place.
Limited data: Attribution modeling requires a lot of data to be accurate. If a business does not have a large enough sample size or if the data is incomplete, the attribution model may not be reliable.
Conclusion
Attribution modeling is a critical component of ecommerce PPC marketing. It helps businesses understand which marketing channels are driving sales and how to allocate their marketing budget more effectively. While attribution modeling is not a perfect science, it is a valuable tool for businesses that want to improve their ROI and maximize their marketing efforts. By testing different attribution models and using an attribution platform, businesses can gain a more accurate picture of their customer journey and make data-driven decisions about their marketing strategy.